Shufflebotham v Milner [2025] EWHC 3321 (Ch)

The decision in Shufflebotham v Milners provides clear guidance, maybe surprisingly, that hostile litigation does not automatically deprive an unsuccessful applicant of their trustee indemnity, provided their conduct was honest and reasonable. This case involved a dispute that concerned the estate of Alan Shufflebotham. Under the will, there were three executors/trustees: Rosemary Shufflebotham (Claimant), Gwyneth Milner (Claimant), and Susan Heather Shuff‑Wentzel (Defendant).

The Claim

The claimants asked the court for three things:

1. To remove the defendant as executor;
2. Permission for themselves to resign; and
3. To replace all executors and trustees.

The Court applied S.50 of the Administration of Justice Act 1985, which provides the court with the power to remove an executor if it is in the interests of the proper administration of the estate.

HHJ Charman, sitting as a High Court judge, in addressing point 1, declined to remove the defendant, stating there was no misconduct sufficient to justify removal and that removal would not benefit the estate. In HHJ Charman’s judgment, the removal would be disproportionate, and the claimants had not met the threshold for such a serious order.

HHJ Charman did, however, allow the claimants to step down as requested at point 2.

With reference to point 3, HHJ Charman appointed a professional trustee to work alongside the defendant to administer the estate, supported by a representative from the first Claimant’s branch of the family.

Cost

The general rule and starting point in litigation is that the loser pays the winner's costs as per Civil Procedure Rule 44. However, in this case, it was that, whilst the claimants were unsuccessful overall - they didn’t ‘win’ on all 3 elements of their claim, they did succeed in resigning as executors (point 2). As such, the court’s view was that taking and applying the general rule at face value would be an overly simplistic way of analysing the outcome of the application.

Consequently, the court determined that there were two questions to be considered:

(a) Whether the Claimants should pay the Defendant’s costs personally or whether those costs should be paid from the estate; and

(b) If the Claimants should pay the Defendant’s costs personally, whether they should be able to recoup those costs from the estate via their indemnity as executors and trustees.

HHJ Charman stated that although proceedings were necessary both to enable the Claimants to be removed as executors and to break the deadlock in the administration of the estate, the form of relief sought, being the application for the removal of the defendant as executor, meant the litigation was classified as hostile. Consequently, the Claimants were to pay the Defendants' costs personally.

When considering the second question, whether the Claimants could rely on their trustee indemnity to recoup the costs of the litigation, HHJ Charman stated that lay trustees should not be held to a standard of perfectionism and that the bringing of the application was a reasonable step by the Claimants. HHJ Charman went on to state that in their judgment, the Claimants acted honestly and reasonably in bringing the application and thereafter in their conduct of such proceedings. Relying on Lewin on Trusts (20th ed) HHJ Charman affirmed that any doubt should be resolved in favour of the trustees.

Conclusion

The Claimants were ordered to pay the Defendant’s costs of the application, but they were entitled to call on their right of indemnity from the estate of the Deceased in respect of those costs.

This blog was co-authored by Claire Brierley and Annabel Lake.